Benefits of a Moderate Restoration While Threats of Growing Fissures are Heard

If the Democrats win the House and President Trump is able to retain a Republican led Senate, this will lead to a deadlocked Congress which will make it hard to get work much done. Resulting in what may become one of the more memorable lame-duck Presidency’s of our time, one in which both sides of the U.S Congress openly disagrees with Trump’s ego driven rhetoric and instead turns to the backing of voters from their constituent state’s as a way to amplify their own policies.

While the Republicans appear potentially vulnerable in the November elections, the Democrats have problems of their own. An open fissure has been displayed as Socialists inspired candidates have won primaries in a handful of Democratic led Congressional districts and appear ready to splinter their political party regarding direction. What does any of this have to do with the economy and markets?

Perhaps this is exactly what crowds of investors in global markets, including Wall Street wants to happen at this point. Politicians forced to retreat to return their homes and become less vocal publicly may be a welcome remedy. Folks are starting to tire of political rabble, a crowded intersection of gridlock may be welcome at this point.

Unknowns: A Source of Concern for Investors

While it is certainly within the arsenal of the Trump Presidency to try and issue executive orders to try and get policies approved and acted upon. A split Congress, one in which Republicans can openly disagree with the White House without the fear of a political backlash may cause ruptures and positive outcomes for the GOP, if President Trump is weakened after the mid-term elections this November.

Democrats, particularly if they clash internally on their pronounced policies and have to spend more time trying to put out their own progressive internal fires may have to realign their thinking and walk more moderate lines. Activists on both sides of the political aisles may have to lessen their banter following election outcomes if they believe their voting public wants less noise.

A lame-duck President, could equate into a deadlocked Congress and debates simmering within each party which produce more moderate stances. However, if nothing is settled in November of this year this may lead to betrayals and revenge politically and potentially new leadership emerging which could be even more cynical, ignorant and insistent on false narratives.

Intriguingly, Wall Street will not be bothered by a deadlocked Congress and President who suddenly is limited by eroding power. In fact the conditions of withered post-revolutionary zeal and a slumber which could develop may allow corporations and investors to move freely about the ruptured political landscape with more liberty amidst the chaos. Investors will react to the sentiment that Washington D.C produces. A calm is wanted.

Within the ashes of Republican and Democratic turmoil a reconciliation may actually be able to take place. The question is if a restoration of moderate power will be finally be seen. Wall Street and most global investors would like a return of the centrists. No one is going to agree 100% of the time on policy, but a reality of transparent government without corruption would be a good start, one that many people actually would agree upon.